Lawyers for the founder of the defunct Capital Bank, William Ato Essien, on Thursday, March 17, 2022, grilled an official of the Bank of Ghana (BoG) at the Accra High Court about the liquidity support the Central Bank extended to the bank.
The BoG official — Emmanuel Edward Arhin, a Deputy Chief Manager at the Banking Department of the BoG, was being cross-examined on some documents relating to the liquidity support which he brought after he was subpoenaed by the court.
The GH¢620 million liquidity support the BoG gave to Capital Bank is the subject matter of the trial, with the prosecution making a case that Essien and the other accused person dissipated the money, leading to the collapse of the bank.
However, throughout the trial, Essien has insisted that the liquidity support was a loan which Capital Bank was dutifully paying with interest until it was declared insolvent by the BoG.
Also, he denied that the liquidity support was dissipated as alleged by the prosecution, but rather made a case that the money was used for normal banking business which was not alien to the banking industry.
Counsel for Essien, Baffour Gyawu Bonsu Ashia, who held brief for Thaddeus Sory, sought to reinforce the position of his client by asking Mr Arhin about some interest payments relating to the liquidity support
He asked the witness whether Capital Bank had an operational account with the BoG, to which he answered in the affirmative, adding that it was the said operational account that the BoG paid the liquidity support into.
Counsel then asked Mr Arhin whether on June 26, 2016, the BoG credited the operational account with GH¢150 million, which was the first tranche of the liquidity support, to which the witness answered yes.
On the said amount, counsel further asked Mr Arhin if an interest of GH¢3, 057,534 was paid, to which he answered yes, after looking through the documents.
Below are excerpts of the cross–examination
Mr Ashia: Can you confirm to this court that on September 25, 2015, the account of Capital Bank was credited with an amount of GH¢300 million?
Mr Arhin: Yes, my Lord.
Mr Ashia: How much was paid by Capital Bank as interest in December 11, 2015?
Mr Arhin: GH¢9, 936,986.
Counsel then brought the defence of Essien to a close after which the prosecutor, Marina Appiah Opare, a Chief State Attorney, also cross-examined Mr Arhin.
Ms Opare asked the witness if the interest payments by Capital Bank were in compliance with the terms of the liquidity support, to which Mr Arhin answered yes.
Hearing continues on March 24 at the court, presided over by Justice Eric Kyei Baffour, a Justice of the Court of Appeal, sitting as a High Court judge.
The second accused person — Fitzgerald Odonkor, a former MD of Capital Bank, is expected to open his defence on that day.
Essien is standing trial with Odonkor and the MD of MC Management Services, a company said to be owned by Essien, Tettey Nettey.
The prosecution has accused the three persons of engaging in various illegal acts that led to the dissipation of a chunk of the GH¢620 million liquidity support given to the Capital Bank by the BoG between June 2015 and November 2016.
The accused persons have pleaded not guilty to various counts of stealing, abetment to stealing, conspiracy to steal and money laundering.
Capital Bank was one of the first banks that collapsed after a massive clean-up of financial institutions by the BoG started in 2017.
On August 14, 2017, its licence and that of UT Bank were revoked by the BoG, after the BoG had declared them insolvent.
The BoG allowed the state-owned bank, the GCB Bank, to acquire the two banks in order to protect depositors’ funds and also enable them to stay afloat.
The hurricane that swept through the banking sector due to the collapse of the two banks further heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity — Consolidated Bank, Ghana.